Quarter of a million job vacancies, but unemployment three times higher

Canada had a quarter of a million job vacancies during the summer months last year, but there were three times as many people looking for work, according to a new type of survey from Statistics Canada.

The agency said Tuesday there were 248,000 job vacancies on average during July, August and September 2011, when the national unemployment rate ranged from 7.1 per cent to 7.3 per cent. It now stands at 7.5 per cent.

Even so, the report shows that for every job opening, there were 3.3 Canadians officially looking for work.

The highest vacancy rates were recorded in educational services, followed by construction and manufacturing, and in the relatively low-unemployment provinces of Saskatchewan and Alberta.

The report is the first of its kind from the federal data-collecting agency, so cannot be compared with previous findings to determine if the number of vacancies was low, high or normal.
Statistics Canada plans to collect data each month from now on, and issue a report quarterly.

An analyst with the agency cautioned the data cannot be interpreted to determine if unemployed Canadians are spurning jobs for any particular reason. In particular, the data could be pointing to “mismatches” in job skills and geography between those who are unemployed and job openings, said Jason Gilmore of the agency’s labour statistics division.

For instance, although comparisons are imperfect, similar surveys in the U.S. finds there are about 4.2 unemployed for every vacancy, a result that would be expected given the higher unemployment rate south of the border, CIBC’s Emanuella Enenajor noted.

Economist Erin Weir of the United Steelworkers union said the Canadian survey still points to an extremely weak labour market.

“The finding that there were 3.3 unemployed people in Canada for every job vacancy confirms that the main problem is a lack of jobs, not alleged disincentives to work or barriers to labour mobility,” Weir said.

In the most up-to-date labour report for December, Statistics Canada said there were 1.4 million Canadians officially unemployed.

But other analysts said the unknowns in the data make it difficult to drawing definitive conclusions.

“What we don’t know is, who’s looking for jobs and what jobs are available and where, or how long the jobs are unfilled,” explained economist Benjamin Reitzes of BMO Capital Markets.

Another weakness of the report, said Reitzes, is that the data are not seasonally adjusted. That could account for the 10-to-one ratio of unemployed to vacancies during the summer months —
when almost all schools are out.

The survey will likely become more useful once there are several years of data to compare, he said.

The report does tend to support underlying patterns of employment from other sources.

In its most recent business survey, the Bank of Canada reported the number of firms reporting labour shortages in November and December “rose notably” in Western Canada, mostly offset by declines in Central and Eastern Canada.

The Statistics Canada survey shows that where the economy is strongest — Alberta and Saskatchewan — the vacancy rate is highest, at 2.6. Ontario was next highest at 1.7, the national average, and Prince Edward Island was lowest at 1.2.